Proper Role and Size of Government ... What Will We Choose?

Want a quick easy to read lesson on how as a country of self governing free people, we managed to get things so far off the track in America?

If so, then please take a few minutes and see if you agree with me that the editorial below is a simple, straightforward and true explanation of how we went from there to here. So here we go, starting with there.

The Role of Uncle Sam editorial deals with our government's historical and current relationship to U.S. economic growth. It says this about an evolving America and the role of government with respect thereto:

"From the dawn of the republic, the federal government has played a vital role in American economic life. Government promoted industrial development in the 18th century, transportation in the 19th, communications in the 20th and biotechnology today.

But the federal role has historically been sharply limited. The man who initiated that role, Alexander Hamilton, was a nationalist. His primary goal was to enhance national power and eminence, not to make individuals rich or equal.

This version of economic nationalism meant that he and the people who followed in his path — the Whigs, the early Republicans and the early progressives — focused on long-term structural development, not on providing jobs right now. They had their sights on the horizon, building the infrastructure, education and research facilities required for future greatness. This nationalism also led generations of leaders to assume that there is a rough harmony of interests between capital and labor. People in this tradition reject efforts to divide the country between haves and have-nots.

Finally, this nationalism meant that policy emphasized dynamism, and opportunity more than security, equality and comfort. While European governments in the 19th and early 20th centuries focused on protecting producers and workers, the U.S. government focused more on innovation and education.

Because of these priorities, and these restrictions on the federal role, the government could be energetic without ever becoming gigantic. Through the 19th century, the federal government consumed about 4 percent of the national gross domestic product in peacetime. Even through the New Deal, it consumed less than 10 percent.

Meanwhile, America prospered.

But this Hamiltonian approach has been largely abandoned. The abandonment came in three phases.

First, the progressive era. The progressives were right to increase regulations to protect workers and consumers. But the late progressives had excessive faith in the power of government planners to rationalize national life. This was antithetical to the Hamiltonian tradition, which was much more skeptical about how much we can know and much more respectful toward the complexity of the world.

Second, the New Deal. Franklin Roosevelt was right to energetically respond to the Depression. But the New Deal’s dictum — that people don’t eat in the long run; they eat every day — was eventually corrosive. Politicians since have paid less attention to long-term structures and more to how many jobs they “create” in a specific month. Americans have been corrupted by the allure of debt, sacrificing future development for the sake of present spending and tax cuts.

Third, the Great Society. Lyndon Johnson was right to use government to do more to protect Americans from the vicissitudes of capitalism. But he made a series of open-ended promises, especially on health care. He tried to bind voters to the Democratic Party with a web of middle-class subsidies.

In each case, a good impulse was taken to excess. A government that was energetic and limited was turned into one that is omnidirectional and fiscally unsustainable. A government that was trusted and oriented around long-term visions is now distrusted because it tries to pander to the voters’ every momentary desire. A government that devoted its resources toward future innovation and development now devotes its resources to health care for the middle-class elderly.

I’ve taken this tour through history because we are having a big debate about what government’s role should be, so, of course, we are having a debate about what government’s role has been. . . .

As government excessively overreached, Republicans became excessively antigovernment.

We’re not going back to the 19th-century governing philosophy of Hamilton, Clay and Lincoln. But that tradition offers guidance. The question is not whether government is inherently good or evil, but what government does.

Does government encourage long-term innovation or leave behind long-term debt for short-term expenditure? Does government nurture an enterprising citizenry, or a secure but less energetic one?

If the U.S. doesn’t modernize its governing institutions, the nation will stagnate. The ghost of Hamilton will be displeased."

Summing Up

What should the role of government be in a self governing society of free individuals?

In turn, that will determine its size.

That gets to what kind of nation we desire.

And the answer to that question will inform us as to whether currently it's properly rightsized, bloated or whatever, compared to history, our current desires and the willingness to pay for those desires.

Because in the end, we must pay for the government we choose. And we will do just that in ways too numerous to count.

Government matters and what government does or doesn't do matters a lot. A whole lot.

Thanks. Bob.